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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (228017)	4/6/2005 12:25:09 PM
From: TimF	Read Replies (1) \| Respond to of 1573504

In principle, it's not a bad thing to structure taxes to achieve political or economic objectives. In practice it often isn't a good idea, and in principle I'm generally against it except in cases where there is a problem with an externality. A tax based on fuel consumption is a good idea. Do you mean a tax based on the estimated fuel consumption of a vehicle, or a tax on fuel? Of the two I prefer the latter. If you do want to reduce the amount of fuel consumed a tax on fuel is less controlling and less distorting than most other alternative government actions that could reduce fuel use. It doesn't favor one solution over another it just makes the commodity more expensive with the likely result that less of it will be used (or at least that growth in its use will be curtailed). I'm not actually for increasing fuel taxes, but I am less against it than "gas guzzler" taxes, subsidies for hybrids or other forms of fuel efficient cars, fuel rationing, higher CAFÉ standards, or other forms of government action to reduce gasoline use. Politically, we can import a larger percentage of oil from friendly countries, instead of being at the mercy of the marketplace and forced to deal with "enemies". For a particular grade or quality of crude there is pretty much just one world price. If we buy oil from Mexico and Italy is buying from Iran, and Iran cuts production it will effect us as much as it effects the Italians, as Italy (and whoever else is buying from Iran) now bids against us for the Mexican crude. If domestically produced crude will go up in price if the "enemy" countries reduce supply. Tim